Importance of the final walk-through inspection

QUESTION: I recently represented a buyer who entered into a contract to purchase a residential property. The buyer decided not to conduct a final walk-through inspection because of other obligations, and proceeded to closing without that inspection. The buyer received the keys at closing. When he went to his new home, he discovered that the seller had taken the stove. After the buyer called me, I reviewed the contract and confirmed that the stove was indeed supposed to convey with the home pursuant to paragraph 2 of Standard Form 2-T. My client has asked me what he should do now. What should I tell him?

ANSWER: The fact situation you describe is a reminder of the importance of the buyer conducting a final walk-through inspection. A buyer who foregoes such an inspection, and discovers damage or missing fixtures after closing, will at a minimum be inconvenienced, and may well end up without a legal remedy. The seller is almost certain to rely on paragraph 4(g) of Form 2-T which states, in capital letters and bold print: “Closing constitutes acceptance of the Property in its then existing condition, unless provision is otherwise made in writing.” Form 2-T’s definition of “Property” includes the fixtures and personal property listed in paragraph 2.

Paragraph 19 of Form 2-T gives the seller an additional argument. It notes that certain contract provisions survive the closing, i.e. those provisions which must be “observed, kept or performed” after the Closing. Paragraph 8(f) provides an example of such a provision. Unfortunately for your buyer, paragraph 14’s requirement to deliver possession at closing does not require any conduct by seller after the closing. The seller may well argue that this provision does not survive the closing.

To avoid this situation, buyer agents should encourage their clients to conduct a final walk-through inspection before every closing. The right to conduct that inspection is specifically guaranteed in Form 2-T. Paragraph 8(c) obligates sellers to provide reasonable access to the Property through the earlier of Closing or possession by buyer, including allowing buyers and their agents to verify the satisfactory completion of repairs and to conduct a final walk-through inspection of the Property.

If the final inspection reveals either material damage to the Property or missing fixtures, the listing agent should be notified immediately. If the issue is not resolved promptly, the buyer should be advised to seek legal advice before proceeding to closing. If the seller agrees to resolve the issue, but not until after closing, the buyer should insist on a written agreement drafted by an attorney. That agreement should recite when and how the issue will be resolved, and set forth the “consideration” required to make the agreement legally enforceable.

Release Date: 09/06/2018